What is invoice discounting?
Invoice discounting is a highly flexible form of invoice finance, releasing cash against your sales ledger to bridge the cash flow gap between providing a service on credit and getting paid.
Unlike factoring, invoice discounting finance lets you retain control of your sales ledger management, solely providing the working capital that would otherwise be tied up as an asset on the balance sheet.
Invoice discounting is typically provided on a confidential basis; however disclosed invoice discounting finance solutions are also available, whilst some additionally incorporate debtor protection to safeguard your business’ cash flow against bad debts.
What are the benefits of invoice discounting?
- Invoice discounting releases working capital against your debtors whilst you retain control of your sales ledger collection.
- Typically, 90% of your sales ledger value is available within 24 hours of the invoice being issued through invoice discounting, boosting the business’ cash flow.
- Invoice discounting finance enables you to gain access to a higher level of funding as your sales ledger grows.
- The cost of invoice discounting is comparable to that of a bank overdraft or a business loan.
- Invoice discounting is typically provided on a confidential basis so your customers are unaware of the invoice finance company’s involvement.
- Disclosed invoice discounting facilities cater for businesses wishing to retain control of their sales ledger management and to maintain close relationships with their customers.
- Online invoice discounting solutions are available, linking to your accounting software.
- Invoice discounting finance can additionally be used to help facilitate overseas trade.
Which invoice discounting solution is right for my business?
Invoice discounting was traditionally only available to larger, more established businesses, but developments in the market mean that this invoice finance solution is now available to the majority of SMEs. The key requirement is that your business has a satisfactory accounting system in place to support the facility.
A range of invoice discounting facilities can be tailored to suit any business’ cash flow requirements.
Hilton-Baird is the UK’s leading independent invoice discounting broker. We work with businesses to find the most appropriate invoice discounting, invoice finance or cash flow solution - in terms of cost, service levels and culture – for them.
Voted Asset Based Finance Broker of the Year in 2009 and 2010, our knowledge of the invoice finance market will ensure success for your business.
Call 0800 9774833 or email info@hiltonbaird.co.uk to speak to one of our funding consultants regarding the cash flow options available to your business, or get an invoice discounting quote.
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